Kappahl's Q1 sales drop 7.5 percent

Kappahl’s net sales for the quarter amounted to 1,166 million Swedish krona (139 million dollars), a decrease of 7.5 percent. The company said, the effect of new and closed stores on the total sales was negative 1.2 percent, change in comparable stores was negative 5.3 percent and translation differences in currencies totalled a negative 1 percent. Gross profit for the quarter was 753 million Swedish krona (90 million dollars) compared to 824 million Swedish krona (98 million dollars), corresponding to a gross margin of 64.6 percent against 65.3 percent.

“Sales during the quarter did not live up to our expectations since the autumn range and the way it was presented to the market did not appeal sufficiently to our customer. The strategy of changing price and campaign structure has not lived up to our expectations in the same way as in the previous year, in part due to a tougher market climate. Our assessment is that Kappahl's sales will continue to be under pressure in the coming quarter, partly as a consequence of the change in buying patterns,” said Danny Feltmann, President and Chief Executive Officer of the company in a statement.

Kappahl’s earnings decline in Q1

The operating profit was 90 million Swedish krona (11 million dollars) compared to 144 million Swedish krona (17 million dollars), equivalent to an operating margin of 7.8 percent against 11.4 percent. Net financial income was 1 million Swedish krona (0.1 million dollars) for the quarter and profit before tax was 91 million Swedish krona (11 million dollars) against 143 million Swedish krona (17 million dollars) last year. Profit after tax was 77 million Swedish krona (9 million dollars) against 107 million Swedish krona (13 million dollars) and earnings per share for the quarter were 1 Swedish krona (0.1 dollars) compared to 1.39 Swedish krona (0.17 dollar) same quarter last year.

At the close of the period the total number of Kappahl stores was 363, of these, 181 were in Sweden, 98 in Norway, 59 in Finland and 24 in Poland. Nine stores were opened during the quarter, including the first store in the United Kingdom, while one store was closed in Sweden.

Picture credit:Kappahl